Economics MCQs

Page No. 212

The Relative price (MRT)of S in terms of T i ?


a2


b 1/2


c00


d1000


View Answer 1/2

Country A has the comparative advantage in ?


aWine


bBeer


c Both wine and beer


d Neither wine nor beer


View Answer Wine

In autarky, the relative price of wine, in terms of beer, in country A is ?


a1W = 1B


b 1W = 2B


c1W = 3B


d1W = 1/3B


View Answer 1W = 3B

In autarky, the relative price of X, in terms of Y in A would be ?


a 1/2 Y


b 3/4 Y


c1 Y


d 4/3 Y


View Answer 4/3 Y

If the countries were to trade along the lines of absolute advantage ?


a A would export X to B


bB would import Y from A


cNeither country would want to trade


dNone of the above



Country A has an absolute advantage in__________?


aProduct X


bProduct Y


cNeither X nor Y


d Both X and Y


View Answer Product Y

Absolute advantage is determined by ?


aactual differences in labor production between countries


b relative differences in labor productivity between countries


cBoth (a) and (b)


dNeither (a) nor (b)



According to the Classical theory of international trade ?


aOnly countries with low wages will export


bOnly countries with high wages will import


cCountries with high wages will have higher prices


dAll of the above are false



The classical trade theories of Smith and Ricardo predict that ?


a Countries will completely specialize in the production of export goods


bConsiderable trade will occur between countries with different levels of technology


cSmall countries could obtain of the gains from trade when trading with large countries


dAll of the above


View Answer All of the above

International trade is based on the nation that ?


aDifferent currencies are an obstacle to international trade


bGoods are more mobile internationally than are resources


cResources are more mobile internationally that are goods


dA country’s exports should always exceed its imports



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